Life in the Land of the Latte Leftists
Portland Mayoral Race Reveals Hardened
Ideologies Resistant to Economic Change
By Jim Pasero

Business
Hazings

“It
ran as a banner headline in The Columbian,” says Neal Arntson, third
generation owner of Albina Fuel. “I’m amazed our decision
to move was such a big deal.”

Referring
to his decision to move his year 102-year-old Portland company to Vancouver,
Wash., Arntson just shakes his head about one mid-size regional company’s
move generated so much publicity.

Maybe it
is only hard to believe that a competitor city would see the transfer
of 100 jobs and families as a big deal when you’re viewing it through
the lens of Multnomah County culture.

Arntson,
who is selling his five-acre parcel on NE 33rd and Broadway, the company’s
home since 1911, explains the reasons for the move. “Because,”
says Arntson, “as I told Jim Francesconi, we move our fuel with
45 percent of the efficiency that we moved it twelve years ago when Vera
began.”

Arntson
is the first to admit that his company doesn’t need to be in a retail
environment and perhaps it is time to move, yet he remains perplexed by
a culture within the city he no longer understands. “I love this
city,” says Arntson, “but it has just changed.”

Arntson
points out a recent “NO TRUCKS” sign that the city posted
across from the company’s main driveway. Albina Fuel has already
decided to move, yet the city insists on putting the sign up anyway—almost
as if to haze the owner about both his departure and his industry.

“Jim
Francesconi, told me he’d take it down,” says Arntson, “but
it hasn’t been taken down.”

Arntson
adds, “Francesconi was the one politician who was concerned about
our potential move. What he did was pass me off to somebody else whom
he was depending on to do the job at the Portland Development Commission.”

But today
the sign remains. Says Arntson, “Francesconi was shocked that the
PDC didn’t come back and talk
to me.”

That episode
says a lot about the city’s stubborn anti-business culture, and
the inability, so far, of Jim Francesconi’s mayoral campaign to
come to grips
with it.

Anti-Almost Everything

When respected
pollsters Tim Hibbitts and Adam Davis (Davis, Hibbitts & Midghall,
Inc.) are asked what percentage of Multnomah County residents are anti—anti-money,
anti-cars, anti-free trade, anti-growth, anti-McDonalds, and anti-Starbucks,
you get definite but different answers.

“Twenty
percent,” says Hibbitts. But, adds Davis, the figure when you count
all residents and not just likely voters is closer to forty percent. That’s
a big anti-growth number.

For the
last three years the Portland area, and especially Multnomah County, have
stubbornly clung to the highest unemployment number in the country. And
according to Francesconi, the city’s business income tax revenue
is down $12 million, or about 20 percent. Last year the County also adopted
the only county personal income tax west of the Mississippi.

Just how
far can the city fall economically?

Tim Hibbits
marvels at the change in Multnomah County’s politics in the last
generation. Says Hibbitts, “Thirty years ago Portland was a muscular
democratic blue collar city, now it’s a latte leftist town.”

Hibbitts
remembers a time when moderate Republicans such as the west side’s
Mary Rieke got elected to the state house from Multnomah County, but he
adds that that was quite a while ago. “In 1972 Richard Nixon got
more votes in Multnomah County than he did in Coos County,” says
Hibbitts.

But times
have changed. The blue collar Democrat city is no more. Instead, says
Hibbitts, “Portland-Seattle-San Francisco form a unique group of
American cities, a troika.”

And the
politics is decidedly left. “San Francisco is further to the left
than Portland, but the difference is slight,” says Hibbitts. “It’s
like saying I’m 5’10” and you’re 5’ 9”.”

Portland,
however, doesn’t possess the physical and financial advantages of
San Francisco—Portland is not a world city.

Stretch
the San Francisco boundary to include the surrounding metro area and the
number of Fortune 500s rapidly swells. Stretch the boundary around Oregon’s
largest city and the number of Fortune 500s grows by … one.

Tracing Political Fault Lines

Hibbitts
breaks the county down ideologically along these lines: “Twenty
percent conservative, 20 percent moderate, 40 percent liberal, and 20
percent ultra-liberal. And the leftists drive the climate, the agenda.”

Hibbitts
also doesn’t see the 20 percent who are conservative as being a
particularly effective group, probably because they are so badly outnumbered.

This is
bad news for what is left of the city’s business community, who
heavily supported Commissioner Jim Francesconi’s mayoral bid. Francesconi
is a candidate who describes himself as a traditional “Robert Kennedy”
Democrat, and who looks to big-city mayors Martin O’Malley of Baltimore
and Shirley Franklin of Atlanta as role models. Francesconi might have
been a perfect fit for the city a generation ago, but last month he ran
second to the more liberal, activist, former city police chief Tom Potter.
The two will face each other in a runoff in November, with Potter having
emerged from the May primary as the solid favorite.

Potter,
who was endorsed by city commissioner Erik Sten, was described by Willamette
Week two weeks before the election in their campaign endorsement:

He has visited
Dignity Village and says it’s the first example he’s seen
of the homeless taking responsibility for themselves. He calls the terrorist
threat to Portland’s reservoirs nonsense and is more than willing
to consider public power, which federal government statistics show is
cheaper than the juice supplied by investor-owned utilities. The father
of an openly gay police officer, Potter is an advocate for same-sex marriage
and, in a face-to-face exchange at City Club this spring, challenged Gov.
Ted Kulongoski for his squishiness on the issue.

Hibbitts
describes the electorate in Multnomah County this May as “grumpy.”
He believes the issue that hurt Commissioner Francesconi last month was
not support from the business community but that “Jim Francesconi
was the functional equivalent of an incumbent, and his campaign allowed
him to be the incumbent.”

So voters
remain in a grumpy mood, especially because of the city’s dismal
economy, an economy worse than in Oregon’s rural areas, which is
a phenomenon that Marty Brantley, Director for the Oregon Economic &
Community Development Department, says “hasn’t happened historically.”

But then
why would the more liberal Tom Potter, whose physical bearing and politics
puts a face on the anti-globalization mob, run ahead of the more moderate
Jim Francesconi?

Why would
the city choose more of the same failed ideology?

Hibbitts
thinks he knows the answer and he’s found it three hours north in
Seattle.

The pollster
believes that the hardest thing for a block of voters to do is to “challenge
their own assumptions,” question their own ideology, no matter how
much the city might be failing. “Seattle threw out three commissioners
last year, but voted in three of the same ideology,” Hibbitts says.

In these
very liberal cities on the west coast, San Francisco, Seattle and Portland,
Hibbitts asserts that when voters are grumpy they don’t question
the ideology but instead “say the leaders are not running the city
effectively, or that they (the leaders) are getting bogged down in idiotic
things, but they don’t question the ideology.”

“Portland
is an intellectually boring city. We have no intellectual debate here,
just different shades of liberalism. I haven’t seen any indication
that a significant number of Portlanders think there is something wrong
with this ideology. They want to blame it on the individual, see the mayor
as the scapegoat.”

Ralph Shaw,
chairman of the governor’s council on economic advisors, remembers
why and how he moved his office out of downtown Portland last year. Shaw’s
story might be anecdotal, but it is, as Hibbitts would describe, a result
of the city’s governing ideology—an ideology people don’t
want to question.

Shaw, a
successful venture capitalist and one of the early investors in Costco
(29th on the Fortune 500 list), for 11 years rented 5,500 square feet
of office on the 400 block of Sixth in downtown. Sixth Avenue is one of
two streets in the city’s heart that are home to the bus mall, a
bus mall which over the years has destroyed retail sales on those blocks.
Shaw was almost doing the city a favor by renting half a floor in an office
building that now stands about half empty. He describes his departure.

“Our
accountant prepares the tax forms and checks to pay expenses and gives
them to me to sign. One of the checks was for the city’s business
tax, and I said to our accountant, ‘This is higher than I remember
in past years.’ She said the tax had been increased and the increase
was applied retroactively to 18 months. And I said, ‘I don’t
remember voting on that.’ She said, ‘you didn’t.’

I thought
to myself, why did they change it to 18 months? The next time it could
be five years. I thought, I better get out of here. I can’t take
the risk that a retroactive tax will put me out of business. I’m
moving to Washington County.”

And so he
did. “I save 40 percent in moving, just by not paying the tax alone,”
says Shaw. A saving he applies to his rent.

Francesconi
admits that voting to make the city’s Business Income Tax increase
retroactive was one of the worst votes he ever made. Why? “Because
it changes the rules. It’s one thing to impose increases for the
schools,” says Francesconi. “It is another to change the rules.”

While Shaw
doesn’t see Francesconi as exactly a business candidate, he does
support him for mayor. Shaw says, “He’s at least willing to
open his mind, to try to understand what is necessary to make the city
work.”

Marty Brantley
sees the mayoral race as a hugely important election. There is, says Brantley,
“a whole economic tone that a new administration might set. Many
people in the business community feel they are not consulted. Perhaps
not appreciated. And I think a

new
administration wouldimmediately
try to establish a rapport, and Jim is the best candidate to do that.”

Governor
Kulongoski, according to Brantley, is very close to Francesconi and has
already attended meetings with the commissioner and Freightliner executives
to discuss an expansion on Swan Island for Freightliner. As for Francesconi
not being an especially strong business advocate in the past, Brantley
says, “It is true that Jim Francesconi hasn’t been a business
commissioner, but in Multnomah County if you said there’s a business
commissioner, that would be like being endorsed by the Communist Party.”

As for Tom
Potter? “Potter doesn’t have the dimensions to be mayor,”
says Brantley succinctly.

If it seems
unusual that the governor’s office would intervene so directly in
the mayor’s race, it shows the importance Oregon leaders attach
to reviving Multnomah County’s economic health.

Tim Boyle,
President and CEO of Columbia Sportswear, and a past recipient of some
the some of the county’s ideological hijinks, understands why a
functioning Multnomah County is so important to the governor’s office.
“The state is hobbled by having its largest metro area being weak,
and not being able to attract new companies. The state (the Governor)
can say come to our most popular place, but … you will get no advantages,”
says Boyle. “Instead you will almost be shunned.”

Boyle takes
on directly the quality of life issue that is so heavily promoted by Portland’s
large anti-growth element.

“Portland
has an extremely popular image,” says Boyle, “Recently we
interviewed for a Sr. Human Resource Manager, and the woman we hired was
from New Jersey. She came because the job was in Portland. ‘Portland
has a tremendous image’ she told us.”

Boyle says,
“It is the combination of the work of McCall and Goldschmidt that
made Portland what it is today, but none of the popularity is due to the
current administration.” He is talking about the 12 years that Vera
Katz has been the mayor.

A Legacy of Economic Lethargy

“Vera,
whatever you want to say about her,” says Neal Arntson, “has
been a forceful leader.”

It isn’t
a stretch to make the argument that other than Washington governor, Gary
Locke, no politician in the Northwest has been as powerful in the last
decade as Portland’s Mayor Katz. She has driven a very strong ideological
agenda, an agenda that has been supported according to Adam Davis and
Tim Hibbitts by a greater number of transplants that have moved here attracted
to its liberalism, as well as by a number of “homegrown” followers.

But to homegrown
international business leaders such as Tim Boyle the agenda in its practical
form makes little sense.

“If
you list the priorities of the last administration,” says Boyle,
“they are 1) The street car – that’s a plus 2) purchasing
PGE…but if you can’t send out a water bill how are you going
to run a utility? 3) covering a freeway 4) moving a freeway, and 5) baseball.”

And Boyle
asks, “How do any of these priorities attract people, or make us
a better place?”

Albina Fuel’s
Arntson would add light rail to Boyle’s list of questionable priorities.
“Light Rail accommodates about five percent of the population—more
likely three percent. In that respect it is for the city a distorted agenda
… that is, if government is really run by the majority with rights
for the minority.”

Commissioner
Francesconi is hearing the complaints not just from business leaders but
also from people in the neighborhoods, the silent majority types, not
the ultra liberals activists that Hibbitts explain drive the agenda. Says
the mayoral candidate, “Young people, 25 to 35 years old that moved
here, they want jobs, many of them are underemployed, that is what I’m
hearing … that there is a lot of insecurity on the economic question,
and Portlanders don’t like reading that we are perceived as not
friendly to business, so they want that healed.”

But do Portlanders
really want that image healed? Ed Grosswiler, Francesconi’s campaign
consultant, believes that in the May primary where the turnout was in
the low-40s, activists, no-growthers, tended to dominate (which may explain
why Potter, with his $25 dollar contribution limit, ran ahead of the well-funded
Francesconi). In the general election in November, where the turnout should
be in the mid-70s, the face of the electorate might be more different,
more economically sane.

Defining “Small
Business”

Still, Hibbitts
isn’t so certain. He keeps seeing the movement of Portland to a
politics closely resembling San Francisco, and in Portland’s case
that means being against globalization, against large business, and friendly
only to small businesses, using the term “small business”
almost as code words against growth.

Talking
"small business" is the right thing for no-growthers to do,
agrees Adam Davis.

“Large
businesses or corporations generally have the lowest image rating—in
Portland or anywhere else in Oregon or Washington—that we've seen
in years,” says Adams. “Small business on the other hand is
perceived to be among the biggest positive contributors to community quality
of life. But, it is a very heterogeneous institution. Yes, you have the
neighborhood book stores, coffee shops, natural food outlets, and the
fashion boutiques, but there are other businesses in Portland like software
development, food supply, and specialized equipment manufacturers who
also are ‘small business’ and who tell us that they have much
at stake internationally. So, there are other small businesses besides
the essential oil and fragrance stores and the organic coffee shops. Furthermore
those businesses on Weidler, Hawthorne, and 23rd depend on customers who
work at the Intels and Nikes of the world.”

Small business
is great—loved by all. But sometimes, even for those ideologically
frozen in their tracks, business reality takes over. Sometimes homegrown
small businesses turn into big businesses, international businesses, global
businesses. The ice cream shop becomes Ben & Jerry’s, the corner
bar becomes a McMenamin’s chain. This year, the little company that
started in St. Johns, Ore. in 1937, Columbia Sportswear, will go over
a billion in annual sales.

“Globalization
is our whole business,” says Tim Boyle, in response and contrast
to the anti-growth direction Multnomah County has been moving. “There
ought to be room for everybody … but anti-globalization can’t
be supported by logic. When you look at it from a historical perspective,
people in villages sometimes built walls around them, but with the Internet
you’re just as connected physically with somebody living in Beijing
as anywhere else. It’s the future and it is nutty to try and fight
that.”

Carl Davis,
Columbia Sportswear’s general counsel, who also represented Nike
for 17 years as their lobbyist to the federal government, may be the region’s
leading expert on free trade. He is mystified about how few people understand
the direct benefits of free trade. He tells an anecdote from a few years
past.

“I
remember the manager of the Hilton Hotel at a roundtable discussion saying
we have 75 companies in Oregon that depend on international trade. I remember
thinking that the manager of a hotel who gets a lot of international guests
believes there are 75 companies in Oregon that depend on trade. No, we
had 8,000 companies at the time.

“People
don’t understand what globalization is,” says Davis. “In
my career I’ve seen country after country become democratic societies
because of trade. I was with Nike for 17 years and I watched Japan change,
and I went into China when people were still wearing Chairman Mao suits.”

Today more
than a third of Columbia Sportswear’s product is distributed in
China. “It is our number two market behind Russia,” says Boyle,
“and the growth potential is staggering.”

Another
market where the company’s products are taking off is Eastern Europe,
which says Boyle is a region that used to have a philosophy against business.

Columbia
Sportswear now manufactures products in Africa, in Madagascar and South
Africa. And Boyle is clear on his view of the jobs created by the Oregon
company. “We don’t want to tell those people, get lost, because
Multnomah County won’t buy anything from you … so just go
back to the Stone Age.”

An
Economic Future at Risk

But whether
Multnomah County moves economically forward or backward is a question
that will be settled by voters in November’s election.

Candidate
Francesconi remembers the issues that forced him to get off the utopian-driven,
city council agenda. “It was over issues such as Dignity Village,
skateboarding in the city, and the lack of focus on jobs,” says
the commissioner.

But can
the candidate who finished a disappointing second in the primary resurrect
his campaign and get voters to take a second look at critical future decisions
they, the voters, are about to make?

Again, Tim
Hibbitts isn’t sure. He sees voters having a strong preference to
shuffle the deck with new faces but keep the same agenda, the status quo.
And it is Tom Potter, endorsed by well-worn political names such as Erik
Sten, Maria Rojo DeSteffey, Bev Stein, Bud Clark, and Gretchen Kafoury,
who really represents the same old, same old Portland.

Still, voters’
unwillingness to internalize real change combined with their dissatisfaction
and distrust of incumbents may be bad news for Francesconi unless he can
demonstrate that although voters may be familiar with his face, it is
he, not Potter, who represents a shift from the incumbent status quo.

If he is
going to be effective, says Tim Boyle, “he’s got to have a
much clearer message, a much simpler one.”